Are Institutions Heavily Invested In Hannon Armstrong Sustainable Infrastructure Capital, Inc.'s (NYSE:HASI) Shares?

By
Simply Wall St
Published
January 07, 2021
NYSE:HASI

Every investor in Hannon Armstrong Sustainable Infrastructure Capital, Inc. (NYSE:HASI) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Hannon Armstrong Sustainable Infrastructure Capital has a market capitalization of US$4.8b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. Let's delve deeper into each type of owner, to discover more about Hannon Armstrong Sustainable Infrastructure Capital.

Check out our latest analysis for Hannon Armstrong Sustainable Infrastructure Capital

ownership-breakdown
NYSE:HASI Ownership Breakdown January 7th 2021

What Does The Institutional Ownership Tell Us About Hannon Armstrong Sustainable Infrastructure Capital?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Hannon Armstrong Sustainable Infrastructure Capital does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Hannon Armstrong Sustainable Infrastructure Capital's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
NYSE:HASI Earnings and Revenue Growth January 7th 2021

Institutional investors own over 50% of the company, so together than can probably strongly influence board decisions. We note that hedge funds don't have a meaningful investment in Hannon Armstrong Sustainable Infrastructure Capital. Looking at our data, we can see that the largest shareholder is Wellington Management Group LLP with 9.4% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.1% and 6.5%, of the shares outstanding, respectively. Furthermore, CEO Jeffrey Eckel is the owner of 1.3% of the company's shares.

Looking at the shareholder registry, we can see that 51% of the ownership is controlled by the top 17 shareholders, meaning that no single shareholder has a majority interest in the ownership.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hannon Armstrong Sustainable Infrastructure Capital

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Hannon Armstrong Sustainable Infrastructure Capital, Inc.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around US$118m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 11% stake in Hannon Armstrong Sustainable Infrastructure Capital. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Hannon Armstrong Sustainable Infrastructure Capital (of which 1 is potentially serious!) you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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